Posted by Sophie Egge on February 10, 2012
After hiking its interest rate by 10 basis points on Monday, Commonwealth Bank of Australia (CBA) reported on Wednesday a 19 per cent increase in profit compared to a year ago. CBA registered a record profit of $3.624 billion for the December half.
The lender, one of the big four, attributed the healthy financial results to a drop in bad debt which offset soft demand for mortgages and increasing funding costs.
However, unlike ANZ and Westpac which cut staff while hiking interest rates, CBA Chief Executive Ian Narev said the bank does not plan to make jobs redundant, reduce its manpower or offshore jobs.
“We don’t believe, if we can possibly help it, that offshoring is the right thing to do,” CBA Chief Financial Officer David Craig said in a statement.
CBA first half profit, which went up 7 per cent on a cash basis, beat analysts’ expectations of $3.5 billion. For the same period 12 months ago, the lender had $3.33 billion profit.
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Posted by Madison Backhouse on February 7, 2012
Having a solid understanding of the interest rates available from banks and credit unions near you is very important if you expect to hold high-earning accounts.
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Posted by Sophie Egge on February 3, 2012
Being in debt can often feel like living in an inescapable hole. Unless youre pursuing medical or law careers or a high-paying business idea its often difficult to insure your earnings will match or exceed your expenses and debt. As a result, the debt isn’t paid off and the interest keeps on accumulating. The hole grows deeper and deeper.
Of course, reducing your expenses is always a prudent way to put more money toward debt payments. However, many times when people look to reduce expenses they focus on peripheral costs: forgo vacations, stop going to the movies, eschew coffee or alcohol, and/or try to spend more responsibly on their children. Ther
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Posted by Sophie Egge on January 25, 2012
It would be fair to describe me as a contrarian investor. I advocate Valuation-Informed Indexing. Valuation-Informed Indexers go with high stock allocations when prices are low (which means most investors are not happy with stocks) and with low stock allocations when prices are high (which means that most investors love stocks).
Still, I am not a pure contrarian. I see five potential dangers.
1) The Momentum Going Against You Might Be More Powerful Than You Realize
The logic of Contrarian Investing is that, when prices get too high, they sooner or later must come down, and when prices get too low, they sooner or later must rise. The trouble is that there is also a logic to Momentum Investing, the idea of going with the herd. Once investors start leaning in one direction, they are inclined to lean harder and harder in that direction for some time.
In 1996, stock prices reached insanely dangerous levels. Some contrarians shorted the market. They were killed. Stocks went up big time in 1996, 1997, 1998 and 1999.
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